Keh-Shew Lu
DIODES INC /DEL/About Keh‑Shew Lu
Keh‑Shew Lu (age 78) is Chairman of the Board and Chief Executive Officer of Diodes Incorporated; he has served as a director since 2001, CEO since 2005, and Chairman since 2020. He holds a B.S. in Electrical Engineering from National Cheng Kung University and a M.S./Ph.D. in Electrical Engineering from Texas Tech University; he brings 40+ years of semiconductor leadership, including senior executive roles at Texas Instruments. Lu is a member of the Risk Oversight Committee; he is not independent under Nasdaq rules given his executive role.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Diodes Incorporated | President and CEO; Chairman of the Board | CEO since 2005; Chairman since 2020 | Led strategy and operations; board leadership and stakeholder communications. |
| WK Technology Venture Fund | Partner | 2001–2005 | Venture investing/industry network. |
| Texas Instruments | SVP & GM, Worldwide Mixed‑Signal and Logic | 1998–2001 | P&L for global analog/mixed‑signal/logic; design, manufacturing, marketing oversight. |
| Texas Instruments | Manager, Worldwide Memory Business | 1996–1998 | Memory business leadership. |
| Texas Instruments | President, TI Asia (ex‑Japan) | 1994–1997 | Supervised TI activities across Asia. |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Lite‑On Technology Corporation | Director (public company) | Not disclosed | Current outside public board role. |
| Asian American Citizen’s Council | Founding Chairman | Not disclosed | Civic leadership. |
Board Governance
- Board structure: Combined Chair/CEO; Lead Independent Director (Angie Chen Button) presides over executive sessions, sets agendas with Chair, liaises with shareholders, and oversees board/committee evaluations.
- Committees: Lu serves on the Risk Oversight Committee; he is not a member of the Audit, Compensation, or Governance Committees.
- Independence: The Board determined five of seven nominees are independent; Lu and President Gary Yu are not independent.
- Attendance: In 2024, the Board held 7 meetings; all directors met at least 75% attendance and attended the 2024 annual meeting.
- Committee activity levels (2024): Audit 7; Compensation 3; Governance 4; Risk Oversight 5.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 757,303 | 805,753 | 740,192 |
| Auto Allowance ($) | — | — | 15,600 |
| Health + Insurance/Benefits ($) | — | — | 21,300 (Health 18,159; Life/Disability 3,141) |
| Director RSUs Granted (Board role) | 6,000 on 5/30/2024 | 6,000 on 5/24/2023 | 6,000 on 5/30/2024 |
| Director RSUs Grant‑Date Fair Value ($) | — | 524,220 (included in total stock awards) | 437,100 (6,000 × $72.85) |
- Effective 2/1/2025, Lu’s base salary is $740,000.
Performance Compensation
| Component | Structure | Targets | Outcome/Payout |
|---|---|---|---|
| Annual Bonus (2024) | 80% financial; 20% strategic. Financial metrics: Non‑GAAP EPS (77%), Net Sales (18%), CSER (5%). Target bonus = 100% of salary for CEO. Range 0–200% of target. | 2024 Financial Targets: Net Sales $1,500m; EPS $3.40; CSER 7. Strategic: set of ESG/operations priorities. | Actual 2024: Net Sales $1,311.1m (Not Met); EPS $1.31 (Not Met); CSER achieved at 120%; multiple strategic objectives achieved/partially achieved. CEO 2024 non‑equity incentive payout: $165,269. |
| LTI RSUs (time‑based) | Vest ratably over 4 years; annual grants. | 31,000 RSUs granted (2/1/2024) plus 6,000 Board RSUs (5/30/2024). | Included in 2024 stock awards of $3,821,600. |
| LTI PSUs (performance‑based) | 3‑yr cumulative Non‑GAAP operating income target; payout 0–200% with threshold at 80%. | 2024 grant: 25,000 PSUs (2/1/2024) tied to 2024–2026 Non‑GAAP operating income. | 2022–2024 cycle (GAAP OI target $1.0bn; actual $709m) paid 0%; no vesting. |
2024 Annual Incentive Performance Details
| Metric | Weight | Target | Actual | 2024 Performance vs Target | % Payout to Target |
|---|---|---|---|---|---|
| Net Sales ($m) | 18% | 1,500.0 | 1,311.1 | Not Met | 69% |
| Non‑GAAP EPS ($) | 77% | 3.40 | 1.31 | Not Met | — (below 80% threshold) |
| CSER Score | 5% | 7 | 5 | Exceeded | 200% |
| Strategic Objectives | 20% | Pre‑defined | Mixed (Achieved/Not Met) | 88% |
Other Directorships & Interlocks
| Company/Entity | Relationship | Notes |
|---|---|---|
| Lite‑On Technology Corporation | Director | Current external public board seat. |
| Gary Yu (DIOD President) | Family tie | Yu is married to Lu’s niece; Yu is also a DIOD director and executive. |
| Kevin Chou (VP Internal Audit) | Family tie | Lu’s son‑in‑law; 2024 total cash compensation ~$374,250 and 1,700 RSUs. |
| Friedman & Feiger LLP | Prior legal services | Director Robert E. Feiger’s firm previously represented Lu and the Company; future services restricted without Board approval to preserve independence. |
Related‑party transactions with suppliers include Keylink JV leases/fees (~$15.0m in 2024), Nuvoton wafer purchases ($7.1m in 2024; purchase agreement through Q2’27), JCP and Atlas (equity investees). Lu is not disclosed as having a direct financial interest in these counterparties.
Expertise & Qualifications
- Deep semiconductor general management across analog/mixed‑signal/logic; prior Asia regional leadership and global P&L.
- Advanced engineering degrees; experienced board leadership across public/private companies.
Equity Ownership
| Holder | Shares Beneficially Owned | % of Outstanding | Notes/Breakdown |
|---|---|---|---|
| Keh‑Shew Lu | 581,774 | 1.3% (based on 46,461,002 shares) | Includes 46,150 shares in UTMA trust and 275,791 shares in Lu Grandchildren’s Trust; Lu has voting/investment authority. Excludes outstanding RSUs/PSUs granted in 2023–2025 that vest beyond 60 days. |
- Anti‑pledging and anti‑hedging policies apply to all directors; Company states no pledges/hedges outstanding to its knowledge.
- Stock ownership policy: directors must hold ≥3× annual retainer within 5 years; executives must meet multiples (CEO 6× base salary). Company indicates all are or expected to be in compliance.
- Stock option retention policy: retain 33% net shares from option exercises (Company currently does not grant options).
Governance Assessment
- Independence and interlocks: Lu is not independent (CEO/Chair); combined Chair/CEO structure increases key‑person/oversight risk, mitigated by a designated Lead Independent Director and independent committee leadership.
- Family ties: Presence of two family relationships (President Yu, VP Internal Audit Chou) creates potential perception risk and necessitates robust related‑party oversight by Audit Committee; Company has a formal related‑party policy and discloses transactions.
- Compensation alignment: Strong pay‑for‑performance design with 0–200% payout ranges and 50% of LTI as PSUs tied to 3‑year operating income; 2022–2024 PSU cycle paid 0% after target miss—an investor‑friendly discipline signal.
- Risk controls: Clawback policy compliant with SEC rules; anti‑hedging/anti‑pledging; no option repricing; double‑trigger equity vesting on change‑in‑control.
- Attendance/engagement: Board and committee cadence is active; directors met attendance policies and annual meeting participation.
- Shareholder feedback: Say‑on‑pay support ~98% in 2024; peer benchmarking by independent consultant; periodic program reviews.
Potential Conflicts or RED FLAGS
- Dual role CEO/Chair (oversight concentration).
- Family relationships with a senior executive and a control function executive (Internal Audit) increase perceived conflict risk; continued transparent disclosure and Audit Committee oversight are essential.
- Prior outside legal representation of Lu by a current independent director’s firm—now restricted, but noteworthy for independence monitoring.
Director Compensation Structure Notes (Context)
- Non‑employee director cash retainers and RSUs exist, but Lu’s board compensation is captured within his NEO stock awards; in 2024 he received 6,000 Board RSUs vesting over 4 years (grant‑date fair value $437,100).
Employment & Contract Terms (CEO)
- Term through May 31, 2027 (at‑will with termination rights); 2024 amendment removed “President” from title and reduced salary to $740,000.
- Severance: If terminated without cause or for good reason, 12 months base salary and up to 18 months continued health coverage; standard bonus proration and award agreements govern equity; change‑in‑control provisions generally double‑trigger for equity.
Performance & Track Record Signals
- 2024 results reflect industry downturn (Net sales $1,311.1m; Non‑GAAP EPS $1.31); annual bonus paid below target; PSU cycle (2022–2024) did not vest, reinforcing performance gating.
- TSR: (30.7)% in 2022; +5.8% in 2023; (23.4)% in 2024; CEO total compensation declined ~47% YoY in 2024, consistent with pay outcomes.
Say‑on‑Pay & Shareholder Engagement
- 2024 say‑on‑pay approval ~98%; compensation program reviewed against a semiconductor peer group; independent consultant retained (Compensation Advisory Partners).
Compensation Peer Group (Reference)
- Representative peers include Microchip, Skyworks, Silicon Labs, Marvell, Vishay, Littelfuse, Monolithic Power Systems, Synaptics, Qorvo, Wolfspeed, among others; peer median revenue ~$2.2bn vs DIOD 2024 revenue $1.3bn.
Fixed Compensation (Additional Detail)
| Year | Stock Awards ($) | Non‑Equity Incentive ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 6,250,510 | 1,714,886 | 118,332 | 9,045,646 |
| 2023 | 8,365,620 | 211,905 | 100,538 | 9,483,816 |
| 2024 | 3,821,600 | 165,269 | 96,166 | 4,823,227 |
Governance Quality Summary
- Strengths: Clear pay‑for‑performance with PSU gating; strong policies (clawback, anti‑hedging/pledging); independent committee leadership; high say‑on‑pay support.
- Watch‑items: Combined Chair/CEO role; disclosed family relationships in senior ranks; related‑party supplier ecosystem requires continued rigorous oversight and disclosure.